The Evolution of Renewable Energy Policy in OECD Countries
The Evolution of Renewable Energy Policy in OECD Countries
Aggregate Indicators and Determinants
This paper analyzes empirical economic and political determinants of gasoline and diesel pricing for about 200 countries over the period 1991-2010. A range of political and economic variables are found to systematically influence fuel prices, and in ways that differ with countries’ per-capita income levels. Fuel prices are set lower by more corrupt, and more centralized, governments; and higher in countries with direct presidential elections, and with plurality voting systems, than with parliamentarian systems and proportional representation. Higher GDP per capita levels lead to higher fuel prices, while export income from selling fossil fuels reduces fuel prices dramatically. Higher motor fuel consumption also appears to reduce fuel prices, most for gasoline. “Pass-through” of crude oil price changes to fuel prices is found to be high on average.
Keywords: Fuel subsidies, gasoline prices, diesel prices, political economy, endogenous government policies
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